Updated: Monday, January 25th, 2016 at 3:16pm

SANTA FE, N.M. — Time may be running out for an extension of New Mexico’s rooftop solar tax credit as legislators weigh whether to forgo $5 million in annual state revenues to encourage more generation of solar energy by households, farms and small businesses.

The current state tax credit offsets up to 10 percent, or $9,000, of costs for a new solar energy system and expires at the end of the year. Bipartisan proposals to extend the credit through 2024 cleared their first hurdle on Monday with a vote of approval by a House committee overseeing energy and environmental issues.

Republican Gov. Susana Martinez declined last year to sign a similar bill approved by the Legislature, and her stance on the new proposal was unclear with legislators gathered for a 30-day budgetary session.

The solar industry and other proponents of the tax-credit extension called it an efficient way to bolster investment and jobs in the solar energy sector, which employs about 1,600 people in the state by industry estimates. State legislative analysts estimate that New Mexico homeowners invested $31 million in rooftop solar energy systems in 2015.

“It’s all about building and diversifying New Mexico’s economy,” David Hughes, chairman of Affordable Solar, an Albuquerque-based solar provider, told lawmakers.

Some Republican lawmakers expressed concerns about maintaining state tax revenues and shifting costs for maintaining the state’s electrical grid to non-solar utility customers. Impetus for renewing the tax credit also may be undermined by the recent five-year extension of a federal investment tax credit that currently offsets 30 percent of solar project costs.

The proposed state extension would initially increase solar incentives by shifting unused tax credits for solar water heaters to rooftop solar. That would free up nearly $2 million a year in tax credits.

At the same time, the tax credit would gradually be reduced from up to 10 percent of solar project costs to 5 percent, before the incentive expires at the end of 2024.

Democrats on the House energy, environment and natural resources committee voted unanimously in favor of the extension, citing economic and environmental benefits.

House Republicans were divided. Republican House floor leader Nate Gentry and bill co-sponsor Rep. Sarah Maestas Barnes, R-Albuquerque, helped move the legislation through its first committee review on Monday.

Rep. James Strickler, R-Farmington, and said rooftop solar prices are falling and that the federal solar tax credit is enough to keep the industry healthy.

“The free market is working,” said Strickler, who works in the petroleum sector.